Ontario Employer Health Tax (EHT), explained
The EHT is a payroll tax Ontario employers pay on total annual wages above an exemption threshold.
The Employer Health Tax (EHT) is a payroll tax charged by the Ontario government on the total remuneration an employer pays in a year. Most private-sector employers get an annual exemption, and the tax applies only to payroll above that threshold.
Who pays it
Employers with a permanent establishment in Ontario that pay wages, salaries, and most taxable benefits. The exemption amount and rate are set by the province and are worth confirming for the current year, because they change.
Why it matters for your books
EHT is separate from CRA source deductions, so it's easy to overlook until a bill arrives. Keeping payroll totals current all year means the EHT is calculated and set aside as you go, not discovered at year-end.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
Is EHT the same as CRA source deductions?
No. EHT is a provincial payroll tax paid to Ontario, separate from the CPP, EI, and income tax you remit to the CRA.
Do small employers have to pay EHT?
Many small employers fall under the annual exemption and owe nothing, but you still need to track payroll to know where you stand. Confirm the current exemption with your accountant.